Voya 2013 Annual Report Download - page 167

guaranteed by ING V. The Senior Unsecured Credit Facility is guaranteed by Lion Holdings, a wholly owned
subsidiary of ING U.S., Inc. As part of the Senior Unsecured Credit Facility, ING U.S., Inc. entered into a
$3.5 billion committed Revolving Credit Agreement (“Revolving Credit Agreement”) and a $1.5 billion
syndicated Term Loan Agreement (“Term Loan Agreement”).
Revolving Credit Agreement. The Revolving Credit Agreement, while primarily an LOC facility, also
includes a revolving credit sublimit of up to $1.5 billion of the $3.5 billion total, which may be directly borrowed
by ING U.S., Inc. This $1.5 billion direct borrowings sublimit is reduced by 50% of the face amount of any debt
securities issued by us, provided, that the sublimit may not be reduced below $750.0 million as a result. The cost
of borrowings and LOC under the Revolving Credit Agreement vary depending on ING U.S., Inc.’s credit rating.
The terms of the Senior Unsecured Credit Facility require ING U.S., Inc. to maintain liquidity of $500.0 million
at all times. In order to meet this requirement in the future, ING U.S., Inc. could be required to forgo otherwise
available draws under the Revolving Credit Agreement.
Immediately following the closing of the Revolving Credit Agreement, ING U.S., Inc. drew $500.0 million
of direct borrowings to replace internally funded financing. In addition, $1.4 billion of LOCs were issued to
replace $1.4 billion of LOCs issued under a pre-existing $2.5 billion syndicated LOC facility. As of
December 31, 2013, $2.1 billion of LOCs were outstanding under the Revolving Credit Agreement.
On July 17, 2012, as a result of the issuance of the 2022 Notes, the direct borrowing sublimit under the
Revolving Credit Agreement was reduced to $1.075 billion consistent with the requirement described above. On
February 11, 2013, as a result of the issuance of the 2018 Notes, the revolving credit borrowings sublimit of the
Revolving Credit Agreement was reduced by 50% of the issuance to a minimum of $750.0 million.
Term Loan Agreement. The proceeds of the Term Loan Agreement were used to replace financing that was
internally funded. ING U.S., Inc. pays interest at a variable rate based on its credit rating and was required to
make principal payments totaling 20% of the original borrowing amount over the first 12 months and 30% over
the second twelve months with all remaining amounts due by April 20, 2014.
During February 2013, we made payments totaling $850.0 million on the Syndicated Bank Term Loan from
the proceeds of the 2018 Notes. On May 21, 2013, we used the proceeds of the 2053 Notes for the repayment of
the final outstanding borrowings of $392.5 million under the Term Loan Agreement. This action, together with
the satisfaction of certain other requirements, caused the requirement to maintain liquidity of $500.0 million at
all times to terminate.
Amended and Restated Credit Agreement. On February 14, 2014, the Company revised the terms of its
Revolving Credit Agreement by entering into the Amended and Restated Revolving Credit Agreement (the
“Amended and Restated Credit Agreement”) with a syndicate of banks. The Amended and Restated Credit
Agreement modifies the original agreement by 1) extending the term of the agreement to February 14, 2018;
2) reducing the total amount of LOCs that may be issued from $3.5 billion to $3.0 billion and 3) reducing the
current cost of LOC issuance fees from 200 bps to 175 bps. ING Bank, an affiliate, acted as Joint Lead Arranger,
Joint Book Manager and Documentation Agent and received $0.7 million for its services and participation in the
syndicate.
Credit Facilities and Subsidiary Credit Support Arrangements
We use credit facilities primarily to provide collateral required under our affiliated reinsurance transactions
as well as certain third-party reinsurance arrangements to which our Arizona captive is a party. We also issue
guarantees and enter into financing arrangements in connection with our affiliated reinsurance transactions.
These arrangements are primarily designed to facilitate the financing of statutory reserve requirements.
Regulation XXX and AG38 require insurers to hold significantly higher levels of reserves on term products and
UL insurance products with secondary guarantees, respectively, than are generally thought to be sufficient. By
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